mcshane. connell: a good show and in the interest of questions -- dagen: you remain to tell me -- connell: all right, thank you. dagen: i am dagen mcdowell. connell: i am connell mcshane. tim weiner's call of duty, heading up to capitol hill to broker a debt deal. dagen: u.s. embassy closed in cairo amid protests, of bid muhamed morsi's power grab. connell: can you hear me now syndrome, wireless carriers are ranked on their performance. we will have the worst and the best. dagen: stocks now lend every 15 minutes, nicole petallides at stock exchange with economic news this morning. is that what is giving the market a lift? nicole: we have a lot going on here. we have jobless claims for the second week, that is good news, you saw growth in economy and in

the last few moments we moved higher and we are positive for the week. when you check it out and industrials we are up 44 points and most of those names on the dow are in the green, names like hewlett-packard and caterpillar and bank of america and united healthcare doing well. the fiscal cliff headline after headline continues to be in the forefront and on everybody's mind that this is what we are seeing, a decent market and the u.s. dollar being weaker today has been a factor in the strength we are seeing as well. connell: treasury secretary tim geithner meeting with congressional leaders and doing so as we speak. dagen: peter barnes live from capitol hill. peter: treasury secretary tim geithner arriving at our or so ago to hold meetings with top congressional leaders. senate democratic leader harry reid, now he is meeting with house speaker john boehner, that meeting just getting underway, after that meeting with senate

republican leader mitch mcconnell and house democratic leader nancy pelosi and with the president and republicans on raising taxes republicans are trying to shift the focus to spending cuts and entitlement reform. >> i hope when tim geithner comes to capitol hill that he will put forward something concrete. so far all we got out of the administration are these demands for higher taxes, they're willing to discuss what is driving federal spending and debt and that is in title and programs. peter: we learned president obama and john boehner spoke for 15 minutes last night. i just bumped into a senior leader among senate democrats and asked him how he felt about this news and he said -- he was more optimistic about these negotiations today. he thought perhaps this man the speaker and the president were exchanging proposals on avoiding the fiscal cliff, john boehner

has a press conference at 11:30 after his meeting with tim geithner. connell: we will speak with -- see what the speaker has to say. with all this back and forth, a decent amount of speculation that a deal is starting to take shape. look at the reporting from politico and they put numbers to its save a framework looks like this. taxes for revenue would rise by $1.2 trillion. families making them to $50,000 would see higher taxes which we have been expecting and entitlement programs would be cut by $400 billion, most coming for medicare and, quote, end of war savings peter barnes and others reported many times as being dubious because they counted the previous budget you have another trillion plus in cuts. that according to politico is the deal, steve murphy is a former campaign manager for dick gephardt and in d.c. today. from the democratic of view anything i just say or just said

sound unreasonable? >> i don't think it sounds reasonable except i don't think it is enough. i don't think either party is being realistic about the enormity of the debt and deficit issue. what you just described is a very easy deal. it is sitting on the table, most of it is automatic. of the deal isn't reached in any case which is going to prompt something getting worked out but we need to cut about more than that. we are spending 23% of our gdpp federal government is, in one fashion or another and taking in 18% and that is not going to change all that much with the outlines of this deal. the democrats are not realistic about how much has to be cut and republicans are not realistic about how much taxes need to go. connell: the democratic side of it since we're speaking with you and delve into that a little more. if you are right about certain aspects of this, if dagen mcdowell and me can come after the president said he wanted the one$.6 trillion in revenue and

say you wants $1.2 trillion because john boehner had $800 billion on the table last times those with the difference we are not exactly political geniuses all the respected political but anyone could have written that story and come up with a number but how about on the spending side, how do you get more and make $400 billion as they say in the article just kind of a start here you think it needs to be a lot more than that? what is the number? >> i do ultimately think, i also think on taxes we need to have fundamental tax reform tied in to the fiscal cliff negotiations or we are never going to get anywhere on that front and that is dragging the economy down. i think taxes have to be higher. $400 billion out of medicare is about what gets cut every year anyway. medicare has been cut from the baseline every year in budgets for as long as i can remember. [talking over each other] connell: that the democrats would sign on to? what number could you get if you

had $400 billion? >> something that addresses the fact that there are $40 trillion in unfunded medicare liabilities over the rest of this century. i am adding that up, $400 billion doesn't get it done. connell: have to remember these things are stretched over ten years. in one case it was 12 years and we thought was 10. steve murphy, thanks for coming on. dagen: the u.s. embassy meantime in egypt now closed amid protests in the country against president mohammad morsi. voting has started on the new constitution. kc mcfarland, formerly distance secretary of defense and fox news national security analyst, great to see you. he is in the catbird seat because he inserted himself into the peace agreement between israel and hamas. >> he negotiated a cease-fire between israel and hamas, the

words were not out of president obama's mouth praising him for this, offering to help him with half a billion dollars of aid, convincing the imf to give him almost $5 billion of aid and what did morsi do? e seized all the controls of power. already got the parliament and the presidency, put his guys in the military and taking over. connell: in the old days they used to say hosni mubarak was not the best guy in the world but the u.s. can work with him. what about now? >> that is an important difference to make because he was a dictator, hosni mubarak was that he was our guy, pro-american and kept peace with israel. the new guy is a dictator too but not necessarily our guy. not necessarily pro-american. he is part of the muslim brotherhood which is a movement going through the entire middle east now, hijacking the arabs spring and they are

anti-american, anti israeli and islamist. dagen: why not pull our funding from the country? >> what we should do is say to them you can't -- your people starve without our aid, they need $1 billion a year to feed their people, they have a shortfall of anywhere from 12 to $20 billion a. everyone thought the saudis would step up to that when the arabs spring started but they want nothing to do with it because the muslim brotherhood, the saudis don't want the muslim brotherhood in saudi arabia so egypt is dependent on somebody so we should use that leverage. if we give aid -- dave: you don't think that will happen. >> the numbers. connell: the other thing that is slightly off the subject of the same subject as syria becoming more -- speculation for example the united states is going to get more involved and give arms directly to the syrians. that is another part of this. >> if you look at the entire middle east in 18 months we have gone from a stable pro-american middle east and unstable chaotic

and many cases anti-american middle east. syria is one of the few countries in the world you don't worry about being too powerful too week because it fits with a par -- [talking over each other] connell: give arms to the people fighting the syrian government? >> give them arms and they could be used against you. what the united states should do is first of all provide humanitarian assistance. a lot of refugees. those refugees, it is a tragedy but they moving to the neighboring countries and spread, the other thing we could do is work with the rebels. are there any groups in the rebel groups that are pro-democracy? those rebels, this is not george washington at valley forge. these are not necessarily people who want to establish a democracy and rights of all individuals. dagen: kc mcfarland. connell: $5 billion in education cuts, if there is no debt deal with another part of this we will take up with union leader randy wine garden in a few minutes. dagen: john boehner meeting with

the treasury secretary right now about trying to broker some deal. we will hear from john maynard this hour and you can catch it here. look at the oil market again, tensions rising in the least and the price of oil rising as well, $80 a barrel.

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dagen: you want to make money? that guy is not connell mcshane. [talking over each other] connell: rather make money while we sleep which putting somebody to sleep -- charles: i like temperature edict. the housing come back, everyone associated with housing does very well except the mattresses, and the stock is extremely % oversold and insiders have become to buy, and downgraded and upgraded the stock, evaluation, trading at one time sales. the problem has been poor execution which has not been that great. the share price, i like it from the evaluation point of view and

reading between the lines and other thing, it feels like they are going to raise prices which you will be able to get through and taking over sealy and tomorrow this is the caveat, the department of justice will probably rule on anti monopoly. if they take over the stock could have a short-term top. if they say no to pressure the stock, near-term this stock could have a big move as early as tomorrow. dagen: any education harley that will go? charles: i think they will take the company but together they will work the pricing in and i don't know why pillows have done better than mattresses. connell: we will listen to all morning. dagen: i made it through the entire segment about mattresses -- [talking over each other] charles: i tried not to look at you. dagen: smiling at like this shaking with laughter. connell: what she is known for. connell: quarter past the hour.

let's go to nicole petallides for stocks now and another one of dagen mcdowell's favorites, research in motion. nicole: lets loose from mattresses to the blackberry 10 which is anticipating january 30th, get to learn a lot more about the blackberry and research in motion and everybody is scrutinizing blackberry because of the intense competition they have seen from apple but at this time today, from goldman sachs, a new buy rating raised the price target and the risk reward for research in motion, the potential is pretty good and in 3 years the street estimates this time are really too low across the board. this is why they sound so positive on research in motion and you have seen a big jump up 7%. look at the major market average, the dow jones industrials up 55 points, the sp 500 up 1/2% so when you have the average looking at the dow you can say we are positive so we can tack on the last gains of

over 3%. connell: thank you. dagen: no fiscal clip deal could mean billions of dollars cut in education. is that necessarily a bad thing? connell: verizon, at&t, a service provider for your cellphone, we have new ratings out today and we will tell you who rates best. that straight ahead on markets now as we look at other market figures, currencies, euro showing strength against the dollar up $1.30. we will be right back.

>> 21 minutes past the hour, this is your fox news minute. the u.s. embassy in cairo closing services early today because of protest going on in the city and urging u.s. citizens to avoid the area. also any egyptian committee voting on a new constitution today despite a power grab by president mohammad morsi. assembly voted earlier to keep the principles of sharia law as a main source of legislation. back-to-back bombings killing 39

in two major cities south of baghdad. more than 100 others were injured. the attacks targeting or shiite muslims, the deadliest attack coming in the city of hello where police estimate 27 have died after staggered car bomb blasts. the director of the international atomic energy agency is now saying no concrete results have been achieved in trying to clarify iran's nuclear ambitions despite his agency's best efforts. the u.s. and other western nations pressuring iran to halt production of uranium, they plan to build a nuclear warhead. those are your headlines. back in an hour. back to dagen mcdowell. dagen: more breaking news for you. you know one of the two winning power ball ticket was sold in the state of missouri. where exactly? we just found out. data tracks mark which is a convenience store chain near kansas city. the winner will share the record

$580 million prize, the second winning ticket sold in arizona. we are still waiting to find out the lucky people who won. connell: more breaking news we are learning about. former president george h. w. bush has been admitted to the houston in methodist hospital, the first president bush, forty-one, or according to hospital folks will embarrass spokeswoman, a former president is being treated because of bronchitis. that is all we know. former president bush, reported to be bronchitis. we have more throughout the day. we talk all the time about the military but here's another area where automatic cuts are coming and a debt deal is reached by the end of the year. education. congressional budget office's federal education programs would lose $5 billion or close to 8% of their budget. we have randy weingartner with us from d.c.. you want to avoid the worst-case scenario for obvious reasons,

what we talk about with the military but some education cuts going forward in this environment inevitable? >> let me just say our prayers are with president bush and i hope he has a speedy recovery. we have had cut after cut after cut in education in the last four years. in this recessionary environment most of the dollars in education are local and state dollars and we have seen 300,000 teacher layoffs, we have seen class sizes spiraling up and this is for the kids who need it most. what the federal dollars in education go for i really targeted programs like early childhood education, when we know that is important, 100,000 kids who get it now wouldn't get it. title i funds go for helping kids to learn how to read in urban areas, something that is

absolutely essential. right now because of all the cuts we have had if you had mid year cuts in education like this, we see a lot of kids being hurt. connell: everybody says we need a strong military to be the united states of america but times have changed, there's more technology, the types of wars we have i have changed but me we could have a strong military few spend money in a smart way. in a similar case a lot of credit to arne duncan and he obama administration for one of their programs, race to the top where there were billions of dollars but maybe not the amount of money you would think, a lot of change so the state has a competition, we want this federal money or we are going to change the type of way that we compete in education, try to get the money but even if we don't we have made the changes. they didn't spend the money in doing that. is this the future?

>> this is what has happened here, race to the top has become an unfunded mandates because there are lots of states that for example have adopted a common core which is really good, really important to have curriculum and standards aligned with what kids need to know it to be able to do. [talking over each other] connell: without the money in some ways of money is tied up. >> except you can't do that without the money meaning we can't because that is rhetorical as opposed to real meaning if we want to help kids have a project based construction we can't just say that is important to do, we have to actually do it which means teachers have to have the curricular materials and get together to actually learn the new stuff and actually teach kids and all of back, your point about not wasting money is really important but we got to spend on their real thing and what teachers tell me as they have in cleveland that they have 50 kids in the class you can't

actually differentiate. we have to make sure the investments that are really important for our future are kept and that is part of the reason sequestration is so bad and why on capitol hill we are here today focusing on how you get enough revenue which the american people have said we need more revenue and fair is a bill on for that says 98% of the people in america still have their tax cuts. at the house passed that bill there is a way of getting to a balance. connell: we have to leave it there but ww will continue this, randi weingarten, thank you very much. dagen: we are waiting on john boehner to talk to whoever wants to listen to him. he is chatting with treasury secretary tim geithner about trying to broker some sort of deal on the fiscal cliff. we will listen to the speaker when he starts talking.

connell: scott minored is coming up. john boehner comments he can move the market, scott will be talking about markets and investing from guggenheim chief investment officer, $160 billion, knows his stuff and we will talk about the economic data and again fiscal cliff and everything else, 39 and the dow i hear the winners we're seeing on the s&p today.

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it is down about 7%. they have come under pressure and then disappointing. the one area of tiffany, the silver department that even that has seen it. this luxury retailer has come under pressure. the dow jones industrials up 40 points. we are seeing the drug and bank stocks doing really well. most of the dow components have been in the green all morning long. back to you. dagen: thank you so much. this countries economy is growing, but not so fast. and increase of 2.7%. up from the first reading of just 2%. if taxes go off at the end of the year, even if just for some

americans, then what? we have scott minerd on with us now. scott, then what? >> everyone talks about the fiscal cliff. i referred to it as the fiscal speedbump. no matter what happens, we are not going to revert a tax increase in some kind of drag on economic activity next year. even if there is no grand bargain that we are all talking about, the shrinking of the federal deficit, whether by spending cuts or tax increases, it will be a drag on economic growth for the next few years. dagen: is that what you have 1.63 roughly on the ten year? >> the federal reserve is drunk. while back the fed is distorting the bond work it.

dagen: does it make sense that the fed is likely to continue the bond buying into the next year? does that make any sense on the planet? >> well, look, i thought qe1 was absolutely essential. qe2 i understood why we did it. qe3, i do not get it. i think the fed is making a mistake here. they could have achieved the same or even a better objective by following a different policy. this is the path we are on. doctor bernanke is obviously completely preoccupied with the risks of having a depression and

he is throwing as much monetary stimulus at this thing as he can. it looks like even if doctor bernanke does not stay on for another term, the leading candidate to take his place is janet yellen and she is actually even more of a money printer ben bernanke. dagen: don't you need someone like that because you need someone in their there was hope -- >> that is right. you are absolutely right. what is happening, because we have driven the rates down so low, artificially low, they should be about two percentage points higher than where they are today. that is causing the recovery in

housing. housing, pending home sales, surged this month. we are talking about an annual, year over year number, of 18% growth. you are seeing home prices appreciating at over 15% a year. dagen: is that dangerous? i asked bob schiller the same thing. it very well could be. >> i think the overall risk is when the fed comes to the point where they realize they have to reverse the policy, interest rates are likely to surge vary dramatically. that will cause orbitz rates to rise, all kinds of expenses to drive, it will be nasty. dagen: what is more important, buying houses or stocks?

>> homes are very, very attractive. i have bought three pieces of property personally in the last year. dagen: commercial or residential? >> residential. dagen: i will not ask where they are. [ laughter ] >> i am not living in them off. [ laughter ] if the government is willing to hand me money at 3.5% to go bought a house, we are talking about and after tax cost of interest on these homes of less than 2%. dagen: you don't think they will take that away for wealthy americans? >> i think that is a third rail. i think they will likely cost it. dagen: from your mouth to people who are listening.

scott minerd. be well. connell: while we wait for speaker boehner to show up and speak to the members of the press, we have other things to talk about. living social cutting its workforce. competition continues to grow. according to the washington business journal, expected to announce roughly 400 u.s. job cuts as early as today. living social also reported a loss of $5.5 million of revenue in the third quarter. dagen: from one deal site to another. this time, groupon in the board meeting to decide the fate of the ceo there and his future with the company. connell: shibani joshi is covering it.

>> the ceo and founder of groupon, seems as though writing may be in the wall. yesterday when the rumors hit the market, the stock price jumped up about 12%. clearly, shareholders like the idea of some fresh blood at the daily deal site. the company has been plagued by a lot of issues. andrew mason cannot seem to get his hands around some of the gripes that investors have with the company. accounting issues still exist. margins are on the do climb. the company posted a third-quarter loss of about $3 million. international growth remains slow. senior management retention remains an issue. if you cannot get good people, it is hard to get stellar

results. take a look at the stock price. look at how the company has fared since becoming public. down about 70-80%. not necessarily good performance and not necessarily a checkmark in the favor of andrew mason. even still, he acknowledges all of his shortcomings and said he is the right person to take this company forward. ultimately, the board of directors will have the final say on whether andrew mason keeps his job or they pull another person in his place. the board meets today with a regularly scheduled meeting. business issues as well as leadership issues. that is when we will learn more about andrew mason keeping his job or not. dagen: thank you very much, show bonnie. there is house speaker john boehner.

>> two weeks ago, we had very productive conversations at the white house. based on where we stand today, i would say two things. first, despite the claims that the president supports a balanced approach, that democrats have yet to get serious about real spending cuts. secondly, no progress has been made in the talks between the white house and the house over the last two weeks. listen, this is not a game. jobs are on the line. the american economy is on the line. this is a moment for adult leadership. campaign style rallies are not the way to get things done here in washington. majority leader and i just had a meeting with the treasury secretary. it was frank and it was direct. i was hopeful we would see a

specific plan for cutting spending. we sought to find out today what the president really is willing to do. listen, i remain hopeful have productive conversations can be had in the days ahead. the white house has to get serious. yesterday, our leadership team met with her stumbles and business leaders about averting the fiscal cliff and achieving a balanced approach the white house says it wants. i made clear we put real concessions on the line by putting revenues on the table right up front. unfortunately, many democrats continue to roll out sensible spending cuts that must rollup any agreement that will reduce our deficit. mr. bowles himself that there have been no serious discussion of spending cuts so far. unless there is, there is a real danger of going off the cliff.

that will hurt our economy and cost american jobs. republicans have taken action to revert the fiscal cliff. to replace the sequestered and paid way for tax reform and entitlement reform. we are the only ones with a balanced plan to protect the economy, protect american jobs and protect the middle class from the fiscal cliff. without spending cuts and entitlement reform, it will be impossible to address our countries debt crisis and get our economy going again and create jobs. right now, all eyes are on the white house. our country does not need a victory lap, it needs leadership. it is time for the president and congressional democrats to tell the american people what spending cuts they are really going to make. with that, i will take a few questions.

[inaudible question] >> we have outlined very specific proposals that we passed in last year's budget and the budget before. we know what the venue is. what we do not know is what the white house is willing to do to get serious about solving our debt crisis. [inaudible question] >> i am not going to get into the details. it is very clear what kind of spending cuts need to occur. we have no idea what the white house is willing to do. [inaudible question]

>> no, no, no. stop. i have to tell you, i am disappointed in where we are. i am disappointed in what has happened over the last couple weeks. with the fiscal cliff, that is serious business. i am here seriously trying to resolve it. i would hope the white house would get serious as well. [inaudible question] >> well, we had a very nice conversation last night. it was direct and straightforward. the assessment i give you today would be a product of both of those conversations. [inaudible question]

>> there are a lot of options on the table, including that one. [inaudible question] >> the day after the election, i came here and made it clear that republicans would put revenue on the table, as a way to begin to move the process to get this resolved. [inaudible question] >> the revenue is on the table. revenue was only on the table if there were serious spending cuts as part of this agreement. it has to be part of the agreement. we have a debt crisis. we are spending too much.

we have to recognize it is the spending that is out of control. >> what size of spending cuts do you think it would take? >> i do not think it is productive for either side to layout hardlines and what the size of spending cuts ought to be. there are a lot of options on how you can get there. the second part of your question was -- [inaudible question] >> listen, there is a framework that we presented to the white house two weeks ago. the framework has been agreed to in terms of a down payment on the end of this year. that would include spending cuts and it would include revenue.

setting up a process for entitlement reform next year and tax reform next year. this is way out of balance. not a recognition on the part of the white house on the serious spending problem that we have. [inaudible question] >> i will do everything i can to avoid putting the american economy, the american people, through the fiasco of going over the fiscal cliff. [inaudible question] >> as i told the president a couple weeks ago, there is a lot of things i have wanted in my life, but almost all of them had a price tag attached to them.

if we are going to talk about the death limit in this, there will probably be some price tag associated with it. [inaudible question] >> it has to be accompanied by spending reductions that meet or exceed it. [inaudible question] connell: speaker john boehner on capitol hill. that was a little bit of a different tone from the speaker. he talked about the need for adult leadership and riiht away went after the democrats that he says are rolling out sensible cuts and spending.

he told one reporter to stop. dagen: he knows he has to be careful. you see just what happened to the market as the negative comments started coming out of speaker boehner. take a look at that chart. this is the third time this week. it was down, it was up. harry reid did a similar vein to the market a couple days ago. you can see how nervous investors are with the progress or lack thereof on the fiscal cliff in washington. connell: peter barnes has been covering it all from capitol hill. the attorney said i am here trying to resolve this. it is serious business. he would hope the white house would get serious as well. peter: no substantive progress in the last couple weeks in the discussions with the white house and then kind of taking a slap your at the president.

he said this is a moment for adult leadership. the white house does have to get serious on spending cuts and entitlement reform. the republicans are trying to shift the discussion in this debate over to the spending that side. the entitlement reform side. the president hammering them on the tax side of it. especially spending, extending the bush tax cuts for the middle class. connell: are you noticing a difference? is that the way it is shaping up today that the democrats are more optimistic than the republicans because republicans do not think they are getting what they are wanting? >> i watch these press conferences and publii events and sometimes i do not take them as seriously as maybe the markets do because, you know,

both sides are posturing here and public. trying to negotiate through press conferences and through the media. senior democrats that i talk to is very leadership here. boehner just said it was a nice conversation. it was direct and forward. this senior democrats that he was more optimistic today about a deal because he thinks, in fact, the two sides are exchanging proposals. dagen: do they understand they have a month. they have a month to get this done. you will see much milder swings in the market. that is when you start shaking up individuals at home. do they get that? >> we have seen all of these deals go down. the debt ceiling and extending the payroll tax.

they all go down to the last minute. midnight on the last day. they are in negotiations. they are talking, perhaps, pass each other, but the fact is, if they have time, they will take it. dagen: causing a ruckus and hoping the other side will get blamed. that is what they are doing. connell: we mentioned the political story earlier this morning. are we so far away from a framework we should not even be talking about it? >> you just heard speaker boehner talk about that. he did present a framework. i am calling it some kind of patch or some kind of proposal that would avoid the fiscal cliff and then tee up all the big stuff for next year. tax reform, entitlement reform and more spending cuts. speaker boehner confirmed there

was some kind of framework that was proposed and is out there. dagen: peter, thank you for that reporting. connell: commodities rebounding after three days in a row after being down. dagen: in today's trade, sandra smith is here. sandra: we will take a look at those commodities now after speaker boehner's comments. as you can see, as he was speaking, along with the stock market, oil making new lows on the session. you are talking about a lot less demand for things like energy and metals and building materials etc. take a look at the reaction with gold. it bounced back considerably. it is now in positive territory. i want to show you the dow 30. more than half of the dow 30 in the green.

we have now turned back into the positive. take a look at intraday chart for the dow. here is that selloff. it is below the positive line. we have bounced back just a little bit. up about six points. the tech stocks dipping to the local of their session. energy also taking a dip. it has been mostly higher on the session. most of those stocks did turn into the red. definitely quite a reaction in the commodity markets. a lot of them that they back off of the lows of the session. these commodity markets, dagen and connell, very close to the fiscal cliff. connell: seems like every day at this time on the financial markets, any little thing coming out of washington.

dagen: thank you, sandra. much more ahead on what speaker boehner just said. connell: cheryl casone and dennis kneale will be taking over on "markets now." ♪

dennis: i am dennis kneale. cheryl: i am cheryl casone would tim geithner on capitol hill trying to sell the president's fiscal cliff plant to republican house speaker john bain and not buying it. he just said white house needs to get serious and the markets are turning lower. also had fiscal cliffs survival kit home additions that you contain right now to prepare. dennis: blamed superstorm sandy. retailers playing the blame game for week november same store sales. analysts already asking what it really the storm or the economy did pull those numbers down? cheryl: we are watching a power

ball conference this hour with more details expected on the two winners of the $580 million record jackpot from missouri and arizona. of gone home to buy my ticket. dennis: stocks every 15 minutes, nicole petallides, for the stock exchange where stocks the suddenly lower on more cliffphobia. nicole: i can say in the wall street traders saying every headline out of washington moving this market, fiscal cliff phobia is a good way to say it, whatever you want to call it we have seen so many dramatic moves in the market, a particular companies making moves in preparation or all been wary about the fiscal cliff, let's see where we are, talking about a dollar jumping, positive for the weekend all up arrows and a great day on wall street after

yesterday when tim geithner was sounded more optimistic and we continued that trend to the upside today but a short time ago we saw john boehner talking and sounding less optimistic and somewhat pessimistic. when you don't see clarity and you don't have bipartisan agreement you see the markets do a reversal and that is what you see on this injured they chart with the s&p 500 still holding the 1400 mark to the key psychological level but this shows how temperamental this market is and we have seen so many companies beating up their dividend payout in order to beat taxes that are likely to go up next year so there's a lot of maneuvering going on. dagen: cheryl: market analyst quoting john boehner unit is about washington. thank you very much. it is a busy day in washington and new york is watching, tim geithner is meeting with congressional leaders in an effort to make headway on a fiscal cliff deal.

peter barnes live on capitol hill has been monitoring the secretary's movements. peter: he just had a meeting a little bit ago with john boehner and this follows a 15 minute phone call john boehner had with president obama last night so john boehner came out to give us a report on this and he said in his view there has been, quote, no substantive progress in talks to avert a fiscal cliff in the last two weeks. take a listen. >> this is not a game. jobs are on the line. the american economy is on the line and this is a moment for adult leadership. campaign style rallies and that is not a way to get things done in washington. peter: republicans want to hear concrete solid major proposals from the white house on spending cuts and entitlement reform. right now tim geithner is meeting with senate republican

leader mitch mccoll was a key player in this, meeting at 1:00 or so with house democrattc leader nancy pelosi in the earlier first this morning with senate democratic leader harry reid. cheryl: a busy day before the treasury secretary monitoring his movements. dennis: what is the next step in the fiscal cliff talks? 30 days left to negotiate. more posturing ahead? more progress? the senior editor at fortune magazine predicts, i remember the moment in the presidential debate when obama said going off the cliff not going to happen. doesn't seem social or right now. >> not going to happen, what he said. i am at harvard kennedy school where right this very minute senior campaign managers from the romney and obama campaign and every other campaign are being debriefed by top political reporters and it is interesting

because obama clearly sees that he has a mandate out of the election on fiscal cliff issues. even though it wasn't a huge issue in the debate the white house is behaving like it has that mandate. what you have been seeing is republicans showing signs of flexibility and i am not just talking john boehner saying revenue is on the table. we have republican senators saying they will stand up to the grover norquist tax pledge. they're willing to break it which is pretty big news. we also have the influential member of congress, republican tom cole saying we have got to agree to extend the tax cut just for those people making $250,000 and below and letting the more wealthy be taxed. definitely flexibility but what you see from democrats is an unwillingness to do serious entitlement reform that would lead to reductions in spending. they want to kick the can down

the road and do more of the next year with the vague promises. dennis: the think republicans will be willing to agree upfront to more tax revenue or higher tax rates as we go without a firm cap on entitlement reform? >> that is the big question. what is a firm commitment? what they're going to look for is some spending cuts this year with an avenue towards entitlement reform next year is the best they are going to get. absolutely what the deal is going to be is the wealthier people, making $250,000 a year, will see their taxes go up. that is a given. dennis: they are an american for earnings so much. republicans say let's not raise the top rate from 35% to 40% but white out deductions so the rich pay more anyway. it is looking more like obama is going to get both. he wants rates to go about not

39.6, and he wants to do something on deductions. he wants to go twice a year. what do you think? >> he wants a mix of things and what republicans will see as a compromise is keeping rates going not as high as originally thought, not quite 40% but keeping them lower and including some of those deductions but if obama got everything he wanted that would be $72,000 average on the top 1% households. dennis: senator harry reid said two days ago let's raise tax rates on the rich and that way we have gone without solving fiscal problems. that will raise $80 billion meaning only $1 trillion more to cut or find new revenue. this has not been discussed at all. what do you think? >> exactly right.

to do serious long-term debt and deficit reduction you have to do entitlement reform. what this president is feeling is the popular sensibility is polls show the majority of americans don't even want to raise the age on medicare from 65 to 67 and they are using that so they don't have to do serious reform but you cannot control the debt or the deficit without serious in title and reform. medicare is going to come crashing down unless you do something period. dick durbin knows that. the liberal democratic senators signed off on the simpson-bowles proposal but right now he is saying i don't want to do that as part of the fiscal cliff solution. let's take off until next year. dennis: thank you for being with us. cheryl: fiscal cliff survival kit. today it is your home addition. new talk but washington made do away with the tax break for home

mortgage deduction or change the calculation and hit high income earners. the managing partner of mortgage banking solutions joins me from austin, texas with his fiscal cliff survival tips. thank you for being with us on our series this week. you say we are thinking of buying a home right now we should do it. why? >> interest rates at the lowest, affordability index at the highest, great time to buy, people are buying and we're seeing bottom form because of investors' coming in and picking the property, that has been displaced, get in and buy now, you not see this for decades. cheryl: i will lose mortgage interest deduction, there is talk about loopholes like primary properties, and you can sell it with no taxes paid with

the rollover or not and changing that as well. that is negative for housing. >> they are losing that incentive, the tax incentive in the refund each month. when that goes away there's one more incentive to let go of that house when things get tight but here is the upside and this is why i recommend people look at this. the inflation component is going to kick in, they will go back up. it is and appreciation -- cheryl: we are talking about a four year recovery, showing tips to our viewers, to supply those i want to go through them and get an idea what they should be doing right now. interest rates may go higher, it will become a nation for

investors and it will remain -- haven't we already had that happen in the last two years? >> there was a seminar here and a group of investors, invited to speak at it. all real-estate investors, a lot of them and the one regret they have is they said if we had any clue how fast this real-estate bottom was going to form and prices go up, we would have bought more. there are billions of dollars to be yet invested in real estate. this is going to drive prices higher, investors doing it, not first-time home buyers and they are in this for six or seven years. cheryl: i like the bullish tone on all of this. thank you for being here. dennis: if you tax them they will leave. we decided in france and now

great britain. the telegraph reporting almost two thirds of the country's millionaires have left the u. k 2 x -- to skip a 50% tax rate on wrote earnings over a million pounds a year. will for that tax went into effect the u.k. had 16,000, millionaires and 6,000 remain the year later. cheryl: we have seen this happen in france, exodus of millionaires in france and now the u.k.. dennis: and already has in california and new jersey. they blew up because of. cheryl: i am not going to stay in high tax states, i am going to texas where the taxes are more intuitive to them. dennis: we go with a flat tax we would eliminate $350 billion a year americans spent trying to avoid paying more taxes. that will go up in january. cheryl: it will be interesting. protesters in each of force the u.s. embassy in cairo to shut

down. up-to-the-minute coverage ahead. dennis: it is illegal to smoke pot in two western states, but we will tell you why employers can still fire you for doing it. cheryl: that makes sense, right? would you pay more for vitamin c in showers or aromatherapy? we will talk to the man behind the stay well hotel concept. dennis: as we do every day this time, here is looking at her, why that the cme with that. [ male announcer ] where do you turn for legal matters?

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dennis: we have stocks every 15 minutes, team coverage, phil flynn in the trading pits of the cme buffers to nicole petallides on the floor of the stock exchange where stock is back up after going down on more fiscal clip phobia. nicole: white knuckles and holding on with each press conference and each headline which way will roller-coaster go? we have the democrats speaking and we heard from harry reid and nancy pelosi and chuck schumer so we are hearing comments and back in positive territory. witt has taken us off of the lows of the day at 12,961 so you are talking almost 50 points from the lows so that is good

news. as far as major market averages we are seeing a perez, a ticketing nasdaq composite is the performer of low three, the best of the bunch and we have seen tech names like hewlett-packard and cisco positive on the dow jones industrials, this is the environment we are in, what is interesting is the vix, the fear index is to the downside. despite the fact we are crossing over we are not seeing the vix with an up arrow which is interesting. that is something that i will continue to watch on wall street and gold is up $9 and that is the latest on the floor of the stock exchange. let's go to the cme and see what phil flynn has to say. phil: i said the first sign of winter was withdrawal from natural gas supplies, summer is coming back. jackson natural gas, not supposed to happen where we see close to the holidays but traders were shocked and

natural-gas celadon, almost immediately, down $0.11 right now. another sign that a mild winter is in store for us which means record supplies and record supplies for this time of year. the other market is on fire earlier and everybody believe we would get the fiscal cliff, that is reversed after the john boehner comments, a very strong day. cheryl: nicole petallides at the nyse. you could call this the host with the most. to make money off of the company. charles: it is the hardware side and a host these companies and in the green room, i am telling you of the back this is not of value play, we are playing this high, looking for an up-front, a

63 ratio of three and 12 times books and in the market, the series bifurcation, and the retailers, this is what the street likes about it, a five year averaged growth, 19% from the industry. cheryl: harvard economics graduate, smart guy -- [talking over each other] charles: the green with embedded goes up -- dennis: putting himself in front of the middle east peace conference, egypt's president plays of the world's stage but created an islamist dictatorship. cheryl: recreational use of marijuana is now legal in colorado and washington state, you could be guilty of a different type of crime by using it. dennis: they don't let you drink whiskey at work either. the world's currencies are faring against the u.s. dollar. every school day.

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>> 23 minutes past the hour this is your fox news minute.

it has been more than a week and former president george h. w. bush is in houston methodist hospital with a lingering off. the 40 second president's condition is not life-threatening and doctors are concerned the illness could turn into pneumonia but it hasn't. president bush's 88 years old. also a few minutes from now president obama will have lunch with his 2012 challenger mitt romney. this will be their first face-to-face meeting since the election on nov. 6. in his victory speech the president promised to engage with the massachusetts governor and consider his ideas. also there are some lucky folks today who struck it really big. two tickets won in arizona and another in missouri, winning national power ball numbers that were drawn last night, you can check tickets anyway, the numbers are 5, 16, 22, 23, 29 and power ball fix, the prize, $579,900,000 which would have

given you $379,800,000 if you took the cash option and those are your headlines. back to cheryl casone me who i assume did not win. did you play? cheryl: look at me on twitter at cheryl casone and you can see my ticket in the garbage. thank you very much. it may be illegal to smoke pot in colorado and washington state but employers can still fire you for doing so. dan springer is standing by in seattle with more. >> what a buzz hill. pot smokers in washington state and colorado are in for a rude awakening. they can smoke legally in their homes but get fired if they failed drug test. marijuana is still classified as an illegal drug under federal law and courts have upheld the rights of businesses to have a drug-free work place. still, business owners are worried they feel this will make it harder to hire workers and drive up their legal bills when

they fire mployees. medical experts say the high from smoking pot last two to three hours but the drug can be detected in the system for up to 0 week. one of the gray areas is how long a person stays impaired. reaction times can be slowed for a 24 hours. it could be a major liability for business owners. >> put a small business owner in the middle of a vise of government requires you to do this, state law requires that and you are stuck in the middle. >> and of course the issue of union workers playing by different set of rules and everyone else. union lawyers say pot should be treated now just like alcohol, smoked legally in the home and does not affect job performance there's been no discipline. because they go through arbitration instead of the regular court system has had success when the comes to members getting fired over medical marijuana. >> we would vigorously defend

our members's rights to engage in legal off-duty conduct that has no impact on their job and the burden would be on the employer to show there is impact on the job. >> looks like the real winners are the lawyers who figured to get a lot of work. cheryl: we are still expecting a challenge from the federal government on all this. great story. thank you. dennis: that is the buzz hill. former today show wicked producer jeff zucker now the new head of cnn. can he rebuild ratings? cheryl: pictures coming and from carrier square in egypt, a protest as voting begins on the new constitution. how big a threat is all of this to u.s. markets and oil prices? we will talk about that. dennis: winners and losers on the s&p. la

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it's nice to have the expt keep dreaming. keep doing. go long. connell: 30 past the hour, stocks every 15 minutes, nicole. nicole: a winner today after coming out with some numbers i posted a quarterly profits for the third quarter, it was higher than expected. the number one u.s. supermarket operator so a lot of people are familiar with them. they said the shoppers were coming in because of that reason. increasing their purchases. this is always a nice clincher, raised their full-year earnings forecast. so here is the stock, up 3.7%.

as far as the broader market, you see the averages have been going back and forth, particularly the dow jones industrial. up one quarter of 1%. the headlines out of washington have been moving the market around. we have been selling off on the fiscal cliff worries. it is still very much a worry on wall street. back to you. connell: thank you, nicole. house speaker ben are throwing cold water on efforts by treasury secretary geithner on capitol hill. talking with democrats now. peter barnes is live from capitol hill, peter. >> hey, dennis. we have dueling press conferences going on here after secretary geithner is making around with housing summit republican leaders. one senate democratic leader, chuck schumer of new york telling our colleagues at the dow jones that thi despite the

posturing and fighting among the parties, there is a deal being done. but publicly speaker boehner met for more than a half an hour with secretary geithner and said there's no substance process processed for the deal. they've had that we put tax revenues on the table. they have to put some serious spending cuts on the table. harry reid in his press conference saying republicans haven't put enough on the table. take a listen. >> despite the claims the president supports a balanced approach, democrats have yet to get serious about real spending cuts. >> we will finalize this this year. they want to avoid the fiscal cliff, balanced approach, they want us to do it right now.

>> right now secretary geithner should be wrapping up a meeting with the senate republican leader mitch mcconnell. maybe they will have a press conference. meeting with house democratic leader nancy pelosi at the top of the hour. dennis: i am sure the sox will gyrate wildly in response. thank you very much. cherly the u.s. embassy in cairo ordered close as protest continues over a recent decree by president mohamed morsi granting himself near absolute power in that country. managing director joins me now. obviously the impact now of the market here in the oil market in particular is what is each of the false into civil war. what happens to oil them. >> you have to look at the suez canal, therefore the price of oil. they do have a history of the army stepping in to maintain this. order in a situation like

"the trade" time, what we have now is a different type of egypt. we had a guest on yesterday telling us the muslim brotherhood and hamas are the same thing. a terrorist organization in the minds of u.s. officials. >> there's a segment of it that is in another segment that is more modern wanting to rule with sharia law. it does not hit the city of military activities hit the muslim brotherhood and of itself is fighting amongst itself in addition the secularist. this is an evolving situation that will take several years to work out. they want to become a revolutionary anti-american, so the threat is there another more to keep prices up. you can't jump to the conclusion that also for the first will do

so. cheryl: there's no discussion of what we are seeing not just today, but coming up this saturday with protesters, supporters coming in. we will have an all-out to you

to really was a good >> israelis feel there shoul the negotiations, posting in it we can be a strong negotiator as he upgraded that is, so it is a bg into the palestinian authorities and again it is not a great situation. cheryl: many trade in the united states, very popular investment over on the nasdaq, are you concerned? >> not at all. they are impenetrable. it will not be affected in a major way in my opinion. cheryl: stay with those companies on the nasdaq. thank you very much. harvard grad, had to give yo a shout out earlier. thank you very much. dennis, over to you. dennis: big deal.

the biggest lottery prize in history, and now it is over. lottery officials say one of two winning powerball tickets was sold near kansas city. the winner will share half of the record $580 million price states collect another $800 million for those who bet on the lottery and didn't win. cheryl: got the e-mail this morning from my mom in arizona, she is not the big winner so i will be here at work tomorrow. but i will say this, fascinating how much the country has been taken over by the lottery fever. some say this is not a good thing. dennis: never understood why people say if they won they would quit their job. i would want to be on the job and be as obnoxious as possible and be able to quit whenever i wanted. cheryl: i would be cheryl

casone, ceo. wake up light therapy. the man behind the contest now open in vegas. dennis: a twitter war going on over how not to go over the fiscal cliff. they will fill you in. cheryl: and take a look at the 10-year treasury. [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the marke he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science it's just common sense, from td ameritrade.

>> i'm tracy byrnes with your fox business brief. security and exchange commission has reportedly filed a civil lawsuit against two former european civil broke us. trading ahead of ibm's purchase of a software program. "wall street journal" reporting one of the men learned about the tip from his roommate. sales rose more than expected in october signaling the housing market is recovering.

the national association of realtors index rose more than 5% for september as steady job gains and record low mortgage rates may have made home buying more enticing. mortgage rates may have edged slightly higher last week but continued to hover near record lows. the average rate on a 30-year mortgage is now 3.32%. the rate has been below 4% all year. that is the latest from the fox business network giving you the power to prosper. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend.

i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. dennis: president of time warner cnn in january to revive the cable network. overseeing and gratis networks including cnn size, but h his 47 years old. ceo of time warner is 60. jeff zucker might have his eye on the bigger job in the longer run. china will still be the largest

moving market by 2020. china eclipsing japan to become the world's number two film market last year. now $2 billion per year growing 35, 40% per year, compared to 5% of the u.s. obama administration for the use of social network, this time maybe too smart. urging americans to tweet their support. now it has become a driving platform jeering at the democrats. the foundation has acquired sponsorship rights. cheryl: yesterday we had the president speaking, it was touting my2k. dennis: and they have. gold and green after a three-day losing streak, sandra smith has the latest in today's

"the trade." sandra: the major stock market averages have gone back to the green after speaker boehner's comments of the fiscal cliff. oil has gone back up, but look at gold, this is the focus for a lot of investors as we approach the end of the year, was going to happen to the fiscal cliff or what isn't if we fall off the fiscal cliff bringing us a year-to-date chart. up about 9%. it has been very volatile. 1800 has been a big test for gold prices. thei believe gold will rise anor hundred dollars by the end of the year saying they believe it will top out at 18.10 per ounce. i just got off with capitalist, it'll be good for gold at the go over the cliff, but if we don't it will still be good for gold. he says by the tips at this point. cheryl: all about the safety. for all of you weary travelers,

today we go to the mgm grand hotel in las vegas we can sign-up for a vitamin c shower among other healthy options. the cofounder, partnering with mgm grand on these hotel rooms. we should say these stay well rooms in the mgm grand, they have 5000 rooms. how do you get your branded healthy hotel rooms across all of the property? >> it is good to be with you today. we wanted to start with a pilot amount we could value engineer some of the actual offers, 42 rooms felt like the right amount. we hope to grow the amount over time. what we're learning from just these 42 rooms of how valuable some of these features are two guests read cheryl read cheryl:k about what is in these rooms. wake up light therapy.

night lighting so people don't have to completely turn the lights when they go to the restroom or whatever. aromatherapy, water filtration systems and our favorite has to be the vitamin c shower. what is the reaction so far from people staying in these rooms? >> the reaction has been fantastic. research underpins all of these features we spent several years doing so. the reaction has been unbelievable. we are able to say people have been up, average room rate stays are high. cheryl: they're about $30 more expensive than the average mgm room. >> about 30% more. dennischeryl: are you having ace negotiations to have these rooms tomorrow the properties? is that something you're working on right now with them?

>> we believe this is something a lot more universal than simply a wellness space tourists will be interested in it, as we believe the hospitality product extends far beyond las vegas, but we are in discussions with mgm to talk about how to take it. cheryl: you'll have to come back and give us an update, thank you. >> thank you, appreciate it. dennis: nicole, two words, cracker barrel. nicole: that is right. their first-quarter numbers came in a net drop 2.6%. one of the things we are talking about is higher cost they were facing, higher expenses. they said the higher expenses actually offset the improved restaurant sales they had. they actually did well, but faced with higher expenses, that really hit their bottom line ann as result o a result of the stoy is down 3.6%.

the dow is higher now. we have the back-and-forth action. back to you. cheryl: all about the volatility and all about washington. thank you. it may be beautiful but why california's government is getting an f. your "west coast minute" coming up. dennis: a cool new app that could help you take care of the christmas pictures you're about to take. cheryl: i look at the winners on the nasdaq. little upgrade over there. we will be right back.

dennis: breaking news, take a look but don't blink, these are the pictures of mitt romney arriving at the white house moments ago.

but he is about to have an awkward meeting with president obama. no press coverage at all, the president says he wants romney's input on the fiscal cliff. some think he might propose a republican compromise of sorts. we shall see. cheryl: it is time for your "west coast minute." an update to a story we brought you last week. the union walkout shut down most of los angeles and long beach ports yesterday. they handle 40% of the nations import trade. they handle the paperwork for the incoming and outgoing vessels, and job workers refused to cross picket lines in a sign of solidarity. if a deal in fiscal cliff is not reached, one in three jobless californians or 4000 people total could lose $450 per week in federal employment benefits that could be discontinued. also due to the high unemployment, debt and crime levels, california has been

deemed the worst run state in the nation by 24/7 wall street, a financial news and opinion website. but the news is better in oregon, up north, medford oregon has been named the best housing market in the country. chosen based on data from case-shiller, economic and price data. santa fe, new mexico, the next best city. dennis: photo albums are a really popular gifts during the holidays and many including mosaic a quick and easy way to make any photo album on your smartphone. with more, let's bring in ceo who released the mosaic app earlier this month. thank you for being with us, tell us what it does. >> thank you, great to be with you. mosaic allows you to create a photo book for your phone. you can make it in less than

five minutes on your phone. dennis: i get the app for free and i pay you for the book? >> you got it. typically a photo book you make it on the web would take about five hours to make, but when you have the experience on your phone is less than five minutes and only costs $20 we will get it to you in three or four days. dennis: a in my choosing the pictures? >> you choose. we just had a customer right into us with a really cool case, she had done her best friend's wedding at the 20 photos of the wedding and on the drive home, hope she wasn't driving, but on the drive home she made a mosaic in the car on her iphone, ordered it and send it to her friend. dennis: you made interesting choice of two names. you call yourselves mixbook, and you gave the product the name

mosaic which was the very first web browser proceeded netscape from the university of illinois. do you think that is an asset trying to sell the company to facebook? >> we are not trying to sell the company to facebook but having two brands is an interesting thing. we created mixbook to be the best experience for a customized book if you want to make something very personal, she can customize the little details and put things exactly the way she wants them. mosaic is designed to be fast and spontaneous. it is designed for the everyday moments. it is fast. dennis: 275 million photos uploaded. >> the app traction, we launched three weeks ago, the traction has been phenomenal. dennis: i need a number.

in that case you're out of here, sir. cheryl: here's an update to a story we brought you monday. featuring this norman rockwell painting we had in the studio with us brought in over $38 million, nearly 100 pieces sold. over 700 grand beating estimates of three to 600,000. the auction set a record with october on cape cod sold over 900 million. the most ever for a single online bidder. dennis: take that french impressionist painters. that is americana right there. should this guy, south korean singer psy, should he be person of the year? cheryl: "time" magazine thinks so out with its candidate.

"markets now" continues next.